COURT OF APPEALS DECISION DATED AND RELEASED DECEMBER 27, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 96-1876-FT
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT III
PATRICIA A. ANDRESHAK,
individually and as
surviving spouse of
Timothy Andreshak, and
NORTH CENTRAL HEALTH
PROTECTION PLAN,
Plaintiffs,
v.
CHRIS CHILDREY, WERNER
LEMBKE, d/b/a
LEMBKE TRUCKING, and
THRESHERMENS MUTUAL
INSURANCE COMPANY,
Defendants,
GREAT DIVIDE INSURANCE
COMPANY,
Defendant-Third Party Plaintiff-Respondent,
v.
COMMERCE AND INDUSTRY
INSURANCE COMPANY,
Third Party Defendant-Appellant.
APPEAL from an order of
the circuit court for Marathon County:
GREGORY E. GRAU, Judge. Affirmed.
Before Cane, P.J.,
LaRocque and Myse, JJ.
PER
CURIAM. Commerce and Industry Insurance Company (C&I) appeals
an order denying its motion to vacate a default judgment in favor of Great
Divide Insurance Company.[1] The trial court ruled that C&I failed to
establish excusable neglect for its failure to timely answer the third-party
complaint. C&I argues that its
neglect was excusable and that, even absent excusable neglect, the trial court
was required to consider its meritorious defense and the fairness of granting
default judgment. We reject these arguments
and affirm the order.
C&I admits the
summons and complaint were served on April 21, 1995.[2] C&I did not answer the third-party
complaint and, on September 14, 1995, the trial court granted Great Divide's
motion for default judgment. On
February 12, 1996, Great Divide contacted C&I in an attempt to collect the
default judgment. C&I filed its
motion to vacate the default judgment on April 22, 1996.[3]
The trial court may
vacate a judgment upon a showing of excusable neglect. See § 806.07, Stats.
Excusable neglect is not synonymous with neglect, carelessness or
inattentiveness. Hedtcke v.
Sentry Ins. Co., 109 Wis.2d 461, 468, 326 N.W.2d 727, 721 (1982). Excusable neglect is "neglect which
might have been the act of a reasonably prudent person under the same
circumstances." Dugenske v.
Dugenske, 80 Wis.2d 64, 67, 257 N.W.2d 865, 867 (1977). Whether a party has established excusable
neglect is a matter committed to the trial court's discretion and its decision
is accorded deference by this court. Martin
v. Griffin, 117 Wis.2d 438, 442, 344 N.W.2d 206, 209 (Ct. App.
1984).
The trial court properly
exercised its discretion when it refused to vacate the default judgment. The affidavits submitted by C&I show
that upon receipt of the summons and complaint, C&I forwarded them to
American International Group Claims Services (AIGCS). AIGCS handles certain claims for C&I and its affiliates. On May 9, 1995, AIGCS sent the complaint to
its regional processing office in Iowa.
There, the senior case control technician, Susan Ewald, determined that
C&I was not the insurance carrier on the trailer. On May 10, she sent the complaint by facsimile to an independent
claims processor company which she believed would handle appearances for
C&I. Ewald never followed up on the
disposition of the complaint. The trial
court properly refused to characterize this conduct as excusable neglect. Each of the recipients of the complaint
merely passed it to another entity on the assumption that it would be taken
care of, with no specific instructions, no regard for the deadline and no follow-up
to ensure that the complaint would be answered.
C&I cites cases in
which this court upheld the exercise of the trial court's discretion when it
granted a motion to vacate a default judgment.
Those cases are easily distinguishable.
First, in light of the deferential standard of review, this court has
not ruled that certain facts constitute excusable neglect, but only that the
trial court did not improperly exercise its discretion when it found excusable
neglect. Second, in Firemens Fund
Ins. Co. v. Pitco Frialator Co., 145 Wis.2d 526, 534, 427 N.W.2d 417,
421 (Ct. App. 1988), the defaulting defendant was not a frequent litigator like
an insurance company and relied in part on its established practice of turning
the case over to an insurance agency.
Here, C&I is a large and sophisticated insurance company with
experience in litigation. It did not
establish that this complaint was processed according to any usual
practice.
The trial court properly
refused to consider C&I's defense or issues relating to fairness and
justice. These matters need only be
considered after a party has established excusable neglect. See Gerth v. American Star Ins.
Co, 166 Wis.2d 1000, 1008-09, 480 N.W.2d 836, 840 (Ct. App. 1992). C&I again cites cases in which this
court has upheld the trial court's consideration of defenses and fairness when
a defendant defaults "if it doubts the justice of the case after reading
the complaint, and the complaint alleged that a statute or ordinance was
unconstitutional." See Davis
v. City of Elkhorn, 132 Wis.2d 394, 400-01, 393 N.W.2d 95, 98 (Ct. App.
1986). This court upheld the trial
court's discretionary decision to require additional proof based on concerns
arising out of the complaint and the presumption of constitutionality. Davis should not be construed
to require the trial court to grant relief based on inexcusable neglect merely
because the defendant has tardily presented an arguably meritorious defense and
complains that the default judgment was unfair.
By the Court.—Order
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.
[2] Great Divide served a second summons and complaint on May 17, 1995 due to some perceived potential defect in the first service. C&I does not dispute the validity of the first service.
[3] The trial court did not base its refusal to vacate the default judgment on C&I's failure to file its motion within a reasonable time. Therefore, we will not review that issue, although C&I took seventy days to file the motion to vacate the default judgment after it was notified of the judgment's existence.